In July 2025, the consumer price index (CPI) was stable. On a year-over-year basis, it was a 2.7% increase over September 2022. This number was the same as in June and well below what economists predicted as uncertainty over tariffs continues to disrupt the business environment. In the meantime, inflationary pressures continue to be a major source of conversation. Leading economic experts and government officials are publicly debating their views of what the effect of various tariff policies will be on consumer prices.
Stephen Miran, President Biden’s nomination for chair of the White House Council of Economic Advisers. He said that there is “no evidence at all” that tariffs have caused a rise in consumer prices. His remarks come at an important crossroads in U.S. economic policy. Tariffs—basically taxes on imports—are forcing companies to adjust their business practices and raising consumer costs.
Economist Mark Zandi from Moody’s provided a contrasting perspective, stating, “Tariff and immigration policy fingerprints are all over the report.” He cautioned that the long-term impacts of tariffs may take time to materialize and not be visible at first. Their impact will only be realized in the months ahead as businesses face increasing difficulties with climbing expenses. He noted that “the tariff and immigration effects aren’t screaming at us, but they’re certainly speaking very loudly and over the next couple months they’ll start yelling.”
The CPI reading for July are largely a result of targeted increases in selected goods due to tariffs. Household furnishings prices soared by 0.7% this month alone. By comparison, apparel price inflation was much more modest at 0.1%. Such sector-specific, incremental changes are a signal that, even as inflationary pressures persist, the drivers of inflation may όχι be across the board.
Closer reanalysis by economists shows the full impact of tariffs have not all fully sunk in. Second, businesses are delaying passing increased costs through to consumers. This delay means that we won’t see an impact of these trade-liberalizing policies for months to come. This is not just a one-month phenomenon, flat-out declared Wells Fargo’s senior economist Sarah House.
Jerome Powell, chair of the Federal Reserve, recently admitted the negative effects of tariff decisions on inflation. He remarked, “It’s been a very dynamic time for these trade negotiations … but we’re still, you know, a ways away from seeing where things settle down.” His observations underscore the lack of clarity about what future economic conditions may be as new trade negotiations develop.
Michael Pearce, the deputy chief U.S. economist at Oxford Economics, pointed to a clear upward trend in core CPI. He pointed out that inflation for all core goods has been just 0.2% over the last two months, which excludes the very volatile food and energy prices. Zandi reinforced this observation by stating, “That they’re on the rise is clear evidence of tariff impact.”
As the economic landscape continues to shift with ongoing trade negotiations and tariff implementations, consumers and businesses alike remain vigilant. The connection between tariffs and inflation is complicated and worth exploring. Just some things economists will be watching closely in the coming months.